Brunei, Malaysia and RI plan Islamic money market

Brunei, Malaysia and RI plan Islamic money market

BANDAR SERI BEGAWAN (AFP): Brunei, Bahrain, Indonesia and
Malaysia are to jointly launch an International Islamic Money
Market (IIMM) in October, the Brunei government announced
Thursday.

Brunei deputy Finance Minister Selamat Munap said the newly
established Brunei international financial center would cooperate
with the central banks of the three other Muslim countries to set
up the global Islamic money market.

Launching of the IIMM will be in October, the government said
in a statement.

"There is now some measure of agreement in principle among the
respective authorities on the need to focus on specific matters
relating to the establishment of the IIMM," Selamat said.

A working group consisting of officials of central banks and
Islamic banks from the countries met here Tuesday and Wednesday
to hammer out the details.

Selamat said it was agreed that the central banks of Malaysia
and Indonesia would focus on product development and the Bahrain
Monetary Authority would work on system development.

"These authorities will also be responsible for obtaining
Shariah (Islamic law) experts from various regions to help them
and Islamic banks to identify liquid Islamic instruments that are
Shariah-compliant as well," he said.

He said Islamic financial authorities in Asia and the Middle
East have voiced concern on "the shortage of such instruments
which could be used to manage liquidity between Islamic banks as
well as between central banks and Islamic banks in both
international and domestic transactions."

"Instruments that are in supply today are not enough to
satisfy demand for Islamic financial instruments in terms of
availability, diversity and sophistication," he said.

The establishment of an Islamic rating agency was also
proposed. An international accounting and auditing organization
for Islamic financial institutions is already headquartered in
Bahrain.

Brunei's ruler, Sultan Hassanal Bolkiah, in July announced the
establishment of a global financial center in his oil-rich
kingdom. One of its goals was the development of a niche market
in Islamic financing.